Return to the Latest

Weak Gainful Employment Rule Leaves Students Vulnerable

October 31, 2014

Obama Administration Weakens Student Protections Against Predatory Career Programs

[WASHINGTON]–Today, the Obama Administration released its final Gainful Employment rule, which seeks to hold poorly performing career programs accountable to students and taxpayers. The regulation is substantially weaker than the draft proposal released by the Department earlier this year and does not go far enough to protect students from predatory institutions. In particular, the final rule scrapped a critical metric that would hold programs with extreme drop-out rates accountable.

The Obama Administration deserves credit for releasing a final rule that provides at least some protection for students after years of intense lobbying from companies seeking to evade accountability. We also appreciate the creation of an interagency task force to increase oversight of for-profit institutions. In light of the weakened rule, we urge the Administration to immediately take additional steps to enforce current laws and strengthen student protections, and to ensure the task force leads to concrete next steps toward greater accountability.

Rory O’Sullivan, Deputy Director of Young Invincibles and lead negotiator representing students during the negotiated rulemaking said, “We are deeply disappointed that the Administration did not go further to protect students from deceptive practices and failed programs. The final rule contains giant loopholes, leaving many students at huge financial risk.”

The final rule:

  • Fails to regulate dropout factories, where students take on debt, but rarely attain degrees.

  • Fails to provide financial relief to students who attended failing programs, essentially using students as guinea pigs to determine whether a program is successful.

  • Fails to prevent failing programs from continuing to enroll students.

We hope that the Administration takes the student voice into account while they implement the rule, and look forward to continued efforts from all stakeholders, including Congress, to do more to protect students and taxpayers from predatory recruiting, sky-high debt, and worthless degrees. In addition, states have taken an increasingly active role in regulating poor performing schools, and we hope that work continues.

“There has been a bipartisan effort in the states to crack down on predatory behavior at the worst performing institutions. We thank in particular attorneys general who have picked up where federal efforts have fallen short and taken legal action against a number of the worst performing schools, and we urge the remaining states to act now,” O’Sullivan said.